Week 3 Team A assignment How are the hospital’s revenues and expenses grouped for planning and control? The way of which a hospital’s revenues and expenses are grouped varies from hospital to hospital. The revenues and expenses are grouped will also vary depending upon the type of hospital, may it be for-profit or non-profit hospital. How the patient care is delivered in the hospital affects the flow of revenues and expenses. The different services offered to the patients, the number of patients and their insurance services, the types of services a hospital offers, and the frequency of use of different services are just a few factors that affect the hospital revenues and expenses. Most hospital revenue comes from billing for patient care services. In most cases, this means billing to private insurance companies as well as federal Medicare and state Medical programs. Hospitals maintain contracts with a broad selection of private health plans, with agreed schedules of reimbursement for basically every type of medical services. Also, supplies make up about 15 percent of the average community hospital's expenses. Of course, these costs are offset through billing to patients for supplies used in the course of their treatment. Capital expenditures can be a huge part of a hospital's expenses. However, the amount and percentage of the budget can vary dramatically by hospital. For example, when a hospital undergoing a major expansion or construction project may have very large capital expenditures, while other hospitals may buy just a few new pieces of equipment, making their annual capital expenses fairly low. Nonprofit hospitals often fund capital-expense budgets for expansions and facility renovations through donations, and therefore the expenses do not come from their general operating budgets.